Sold House, waiting to buy: what do I do with the money?

littleIdiot_2

Hi all,

I HAVE tried searching around this forum but am struggling to work out what to do.

I'll try to keep this short, rather than a long rambling story:

• My wife and I have just sold our house
• Living in rented accommodation while looking to buy next house
• Have £35,000 sititng in current account :eek:
• Will use this money as deposit on next house
• It could take upto 6 months (or more?) to find a suitable property
• My wife works part time, so on lower tax bracket
• I work full time and am on higher tax bracket

My questions are:

Which account should I put the money into?
- the TopTips suggests London & General's 6.55%
- any other suggestions?

Can I put it all in my wifes' name and pay less tax?
- is there anything I should take into consideration?

How do I work out how much interest I will receive from my savings per month?

Any other suggestions as to what to do?

Many thanks,
littleIdiot

caliston

You should be able to put it in your wife's name and pay less tax.

What I'd do first of all is open the best instant access savings account you can at the bank in which you hold your current account. If they can give you the decision on the spot in a branch, that's even better. They should be able to do an instant transfer to/from your current account. Dump the money in there until you have opened a better account - at least you'll be earning some interest in the time it takes to fill in application forms, send proof of ID by post, etc to another bank.
Make sure this temporary account doesn't have an interest penalty for withdrawals - you're only going to be using it for a few weeks.

Roughly at 6.4% you'll make £35K*0.064/12 = £186 per month. If you have an account that pays monthly interest to another account it'll be slightly less than that because the interest doesn't stay there for the whole year.

PokerPortal

I would start with opening 2 ISA's (one in your name and one in OH name) if you haven't opened one already this tax year and deposit £3000 in each of them. Dump the £29,000 remainder in a high interest savings account in your wife's name. Come 6 April, and you still haven't bought a house make another deposit of £3000 each in the 2 ISA's or in another ISA if there are better ones available.

littleIdiot_2

That makes a lot more sense - hadn't thought of doing that (never looked into ISA's before).

I hadn't realised you can take cash out fo ISA's and still benefit - I see we can't add money back in within a tax year but not likely to need to